The company also saw its loss ratio deteriorate as it reported its annual results
Hastings’ has reported a nosedive in profits for the year ended 31 December.
The group made a post-Ogden adjusted operating profit of £109.7m last year, compared with £190m in 2018, it reported today.
It also reported £69.7m as its profit after tax, down from £130.6m in 2018.
The company also saw a significant year on year deterioration in its loss ratio - 82.6% (including Ogden) compared to 75% the year before.
Hastings said that this was driven by an elevated market claims inflation, with increase in repair and third-party credit hire costs, and a small number of larger bodily injury losses.
However, its gross written premiums were stable at £961.6m for the year, slightly up from 2018: at £958.3m. Hastings underlying average premiums were up 5% with the increase in prices being offset by a change in the risk mix of business.
Challenging market environment
Its chief executive Toby van der Meer said that “the market environment was challenging in 2019”.
He put this down to “elevated claims inflation which has impacted our loss ratio for the year and our adjusted operating profit”.
Van der Meer, said: “We remain focused on pricing discipline and are applying rate ahead of the market. Against this backdrop, I’m really pleased by the progress the Hastings team has made delivering on our strategy during 2019, which positions us well for 2020 and beyond.”
It follows Hastings being impacted by claims inflation in its third-quarter update last year.
Free cash was £141.0m, down from 2018 which was £167.7m.
Digital proposition
The group has improved its digital proposition with a growth in live customer policies at 2.85 million, up from 5% last year which was driven by continued retention rates.
Van der Meer said that with that growth delivered through more of our existing customers choosing to stay with us, leading to a five-percentage point improvement in our customer retention rates.
There was further growth in home to 209,000 policies, a 27% increase year on year, as we continued to enhance the capabilities of the Group’s in-house underwriting team and work with third party panel members.
“We have improved our digital proposition, with record levels of digital adoption. Our continued investment in technology, data and modelling techniques has also enhanced our capabilities in pricing and fraud detection, with 96% more cases of fraud identified in 2019 compared to 2018,” he said.
Underwriting
Its underwriting subsidiary achieved a Solvency II coverage ratio of 151%, down from 2018 161%,
This was 156% before deducting the anticipated dividend which is due to be paid to the group entity in the first half of 2020.
“Our colleagues and culture are fundamental to our success. We’ve achieved the second highest colleague engagement score in the Group’s history and met the 30% Club target a year early.
“It’s an honour and privilege to lead such a great team and my thanks go to our 3,300 colleagues for what they do every day for our customers and each other,” Van de Meer added.
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